SPRINGDALE, Ark.—The U.S Department of Labor's Office of Federal Contract Compliance Programs has charged a unit of Cargill Inc. with discrimination and is seeking cancellation of its at least $60 million in government contracts.

A spokesman for the targeted unit, Springdale, Ark.-based Cargill Meat Solutions, denied the federal agency's charges and said they are “unfounded and without merit.”

The administrative complaint, which was filed Tuesday, alleges that Cargill Meat Solutions systematically discriminated against 4,069 qualified female, white, black, Hispanic and Native Americans who applied for entry-level production jobs at the facility. Cargill Meat Solutions is a subsidiary of Minneapolis-based Cargill.

The federal agency said it has been unable to secure a fair resolution from Cargill to pay back wages and interest to the rejected job applicants and to extend job offers to at least 167of the affected workers.

In addition to seeking cancellation of the at least $60 million in government contracts awarded to Cargill, the federal agency is seeking “debarment” of Cargill for future government contracts until Cargill resolves all violations and corrects its discriminatory employment practices.

“This is an unfortunate case in which thousands of qualified workers were denied the opportunity to compete fairly for jobs in a tough economy,” OFCCP Director Patricia A. Shiu said in a statement. “Cargill has discriminated against vulnerable workers. OFCCP is prepared to use every tool at our disposal, including canceling a company's federal contracts when necessary, to achieve the goal of equal opportunity for workers.”

The agency said it discovered the company's discriminatory practices during a scheduled review to determine its compliance with Executive Order 11246, which prohibits federal contactors from discriminating on the basis of race, national origin or sex when making hiring decisions.

“The investigation found that the company's selection criteria were subjectively and inconsistently applied. As a result, women were less likely to be employed in entry-level production jobs, and Asian and Pacific Islander job seekers were unfairly favored over other racial groups,” the agency said in the statement.

In a lengthy response, the Cargill Meat Solutions spokesman said in its statement, “We find the labor department’s allegations of discrimination to be disappointing given that Cargill’s employee population at Springdale, Ark., is diverse and is 84% minority. We believe the allegations are based solely upon statistical analysis and not based on an analysis of an individual hiring decision.”

The statement said, “This situation feels like government-imposed hiring based on historical statistics and not reality.”

The company said that from August 2005 to July 2008, the time frame cited by the government, jobs were plentiful in Springdale, Ark. “Cargill Meat Solutions complies with all federal regulations pertaining to hiring practices, including nondiscrimination and legal right to work in the U.S.”

The company also said it “selects the best qualified candidates from open positions, without regard to their gender, race/ethnicity, nationality or any other nonjob-related category which complies with both the law and company policy.”

Cargill also said the company “remains committed to treating all job applicants and employees fairly.”

Cargill Meat Solutions processes turkeys for sale under the brand names Honeysuckle White and Riverside.

Observers have said settlement of sex discrimination against units of Tyson Foods Inc., which was announced in September, reflects a more aggressive stance by the federal agency.